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From Essential Questions: 4. What world happenings also contributed? How did war in Korea help Japan’s factories? What kinds of things did the USA do that helped Japan recover after the war? Why do other countries need or want Japanese products? How do peace treaties with other countries help in exporting and importing? (Post-war American occupation, Korean War, Free world trade boom)
Part Five: Causes of Stagnation Lesson 11: Money and Land Problems
FOR INSTRUCTORS ONLY Background Information 5. Why did problems arise? The Price of Japanese Land As the Japanese became more prosperous, they wanted better houses. Japan is a country of mountains and many people. This means that the price of land kept going up as more people wanted to build bigger and better houses. Land prices continued to rise for over 40 years so that anyone who bought land realized a substantial price gain when it was sold. Many people (private citizens, government officials, business executives, financial investors) became involved in land speculation. The Value of the Yen The value of the yen and dollar was originally fixed at $1=360 yen after the war. In 1972 the exchange rate was changed from the fixed rate to a floating one. In 1985 because the US felt that the yen was still too cheap, there was a meeting of finance ministers from 5 countries (USA, France, Eng- land, Germany, and Japan) who agreed to increase the value of the yen. For the Japanese businessman this was alarming. Something that had cost only $1.00 to export or produce, could now cost over $2.00 or more. The Bursting of the Economic Bubble Many companies and individuals had begun borrowing money to take ad- vantage of the speculation of land, stocks, and art works. Most of these loans were secured by land which continued to rise in price. The government, being concerned with these massive speculative money- making practices, passed a law which critically limited the banks in financing land development. With funding no longer widely available, land and stock
Lessons about Japan - 222 Japan’sReligion Economic in Japan Miracle prices fell sharply. Then, the Bank of Japan raised its interest rate six times during 1989-1990. With this bursting of the economic bubble, many companies went bankrupt and many private investors lost their money. Government-regulated economy With the government controlling what is produced as well as prices, in today’s global market the government takes too long to make and/or change decisions. The government had supported many large companies who had trouble keeping up economically with their loans, but their hands were tied as they had to wait for the government to allow them to make necessary changes quickly. Some companies had to close in bankruptcy, but for some even that was not allowed by the government and the government then had to keep them afloat. Lack of Stable Leadership In the face of all these financial problems, the political system has had many problems as different factions accuse each other as to the reasons for the problems. As a result, the prime ministership has been rapidly changed many times during the last decade, often within a year of election, as it is the national legislative body who elects the prime minister.
Activities: Part Five: Causes of Stagnation Lesson 11: Money and Land Problems Requires 1 hour Materials: · Paper money (may be made from construction paper, stamped to make it official) · Construction paper and markers; Paper for loan contracts and deeds
TO BE USED WITH STUDENTS:
Setting the problem: You have the great fortune of being in a country where land prices are going up, and up, and up! If you buy land now, it will just keep increasing in value so that when you sell it, you can make a lot of money! Just take a loan out and buy some land now! 1. Money and Land A. Divide the class into groups of 2-3 each. Each group has a small piece
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of land, a desk. B. Let each group “borrow” from the First National Teacher’s Bank, located at your desk, in order to “buy” up the land in the room. They may borrow with the collateral of the land they own. For example, the land that they now have (a desk) is worth $5000 at first. They may borrow this amount so that they can make deals with others to buy more land. The interest rate should be quite low, 0.5% perhaps, which would be $25. C. Every five minutes the price of land should go up. Every 10 minutes require that all groups make a loan payment to the bank. The payment should include a small interest charge, making about a $26 payment. D. Once all “land” has been bought, encourage students to get more bank loans and buy land from each other, always at a greater amount than before. Let them know that since there land is now worth more, they can take out loans for more money. E. At the end of 30 minutes, make the value of the money increase. What cost $1 before, costs $2-3 now. How does this affect the value of the land? (The same piece of land will now cost twice as much.) E. Suddenly in 10 more minutes, raise interest rates on new loans to 5% or 10% or 15% and begin to limit the loans so that borrowing of money is eventually almost nonexistent. Advise students to sell land, cutting prices, if necessary. F. At first, prices for land should even out with some slight drops in price. G. Next, land prices should go down drastically. H. Remember throughout all stages, all groups should be trying to make their loan payments every 10 minutes. If they cannot make their payments, you may give extensions, for a fee. And, you may have to foreclose on some property or stop the game at that point. 2. Debriefing What happened when money was available and land was cheaper? What were the results when the value of land kept increasing? Were profits made by any groups? What happened when the money increased in value. What happened when getting loans almost stopped and land prices fell. What could have prevented this loss? Would it have helped if there had been one leader who could have controlled the situation? Would the leader needed to work quickly? Do governments work quickly or do matters need to go from one office to the next in many cases, especially when no one person is in charge?
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3. Part Five Debriefing Share the following essential question and subquestions for part five with the students. See if they can determine the five given answers. If not, ask them to explain how the given answers could also have helped Japan’s economic growth.
From Essential Questions: 5. Why did problems arise? What is supply and demand? How can there be a supply and demand of land? Why must there always be a ceiling for prices? What happens when money is suddenly worth 2-3 times more? What happens when the rules are suddenly changed? (Increase in land value, Increase in value of the yen, The bursting of the economic bubble, Government-regulated economy, Lack of stable leadership)
Assessment: A pre/post test is included (Handout H). Before teaching this unit, it is suggested that students be given a pretest to help assess just how much is known and then given as a post test afterwards. Either one or both may be given as needed. After the unit, students should be able to explain how various factors helped create a tremendous economic growth in Japan as well as some that helped to burst the bubble.
Grade Adaptations: For Younger Students Following a Budget Game: Put students in groups of clubs, of about 2-3 in a group. Use a budget of $20 income from dues with some required expenses, such as lunch money or bus transportation for an outing of the club. Ask them to make a budget which includes buying needed equipment, supplies, club souve- nirs, etc. on a field trip with the club. Who’s the Leader Now? : Cut down the requirements for the presentation to just a magazine ad for each use of the pine cones. Money and Land: Just let the value of the land increase and then decrease; omitting the increase of the value of the money.
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For Older Students Besides these lessons, have students search the internet for additional factors and events which influenced the development and then the recession of Japan’s economic system. If class discussions sometimes lead to a great division in thinking, it provides an excellent opportunity to incorporate a debate.
Relationship to Social Studies Standards:
Grade 9, Economics, Grade-level Indicator 2
Explain how changing methods of production and a country’s productive resources affect how it answers the fundamental economic questions of what to produce, how to produce and for whom to produce.
Grade 9, Economics, Grade-level Indicator 3
Analyze characteristics of traditional, market, command and mixed economies with regard to: (a) private property, (b) freedom and enterprise, (c) competition and consumer choice, and (d) the role of government
Grade 11, Economics, Grade-level Indicator 4
Describe the functions of the components that make up an economic system and describe the relationships among them including: (a) business, (b) productive resources, (c) financial institutions, (d) government, and (e) consumers.
Grade 11, Economics, Grade-level Indicator 5
Identify factors that cause changes in economic growth including the effects of supply and demand on the labor market.
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Grade 11, Economics, Grade-level Indicator 7
Explain how countries use their comparative advantage to produce goods and services for trade with other countries.
Grade 12, Economics, Grade-level Indicator 1
Compare how values and beliefs influence economic decisions in different communities.
This lesson and all handouts were developed by Alpha Coles Morgan, teacher, Graham Rd. Elementary School, Reynoldsburg City Schools.
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Handout H, pg. 1: Pre/Post Test
Part I. Circle the correct letter. 1. Japan is the world’s ___ largest economy in the world today. a. second b. fifth c. tenth 2. Most Japanese citizens are______. a. poorly educated b. moderately educated c. well educated 3. Japanese citizens have been encouraged to ______. a. be strict vegetarians b. save money c. live in townhouses 4. After World War II, Japan had to ______. a. rebuild its factories b. import rice c. move the capital city 5. Many believed the price of Japanese ______would always just keep going up. a. tele- visions b. land c. loans 6. Japanese exported products used to be ______. a. cheap b. expensive c. technical 7. The American whose name is associated with quality in Japan is ______. a. Westinghouse b. MacArthur c. Demming 8. One of the most expensive areas to finance in a national government is often ______. a. building schools b. finding cures c. the military 9. TQM refers to ______. a. The Quick Money b. Total Quarterly Month c. Top Quality Management 10. According to the Japanese government economy should serve ______. a. the nation b. the family c. the individual
Part II. True or False ___1. Japan is able to export many products around the world. ___2. Due to the baby boom after the war, many more young adults were needed to work on farms to produce enough food. ___3. After World War II, the USA military occupied Japanese land. ___4. The Japanese government would determine the prices of some products for com- panies. ___5. In Japan, children are taught early to compete to be the best because an individ- ual’s goals are the most important way to success. ___6. The value of the yen is always equal to a penny because 100 yen equals $1. ___7. In an effort to stop land prices from rising, the government passed a law to decrease the availability of loans. ___8. Capitalism in Japan is modeled after that in the United States. ___9. The national government always makes decisions quickly. ___10. The Japanese have become quite good at improving products.
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Handout H, pg. 2: Pre/Post Test
Explain how the following can be true.
1. Competition can help create better products.
2. Having the same employees and leader over a period of several years can help a company’s finances.
3. The Korean War actually helped Japan’s economy.
4. Japanese products are considered some of the best in the world.
5. The Japanese were quick to adopt policies to change management, but America was not.
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Answers to Handout H: Pre/Post Test
Key for Objective Part I 1. a 2. c 3. b 4. a 5. b 6. a 7. c 8. c 9. c 10. a
Key for Objective Part II 1. true 2. false, were not needed on farms and went to the cities to find work 3. true 4. true 5. false, taught to help one another and that the goals of the group are more important than the individual’s 6. false, was fixed, but now variable 7. true 8. false, United States believes economy serves the individual first and then the nation with free trade being highly desirable which is just opposite to Japan. 9. false, “cutting through red tape” takes time 10. true
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Bibliography From the 1997 Learning About Our World: Japan I used the items listed under numbers 4 and 5 of the original lesson on pages 118-119 as a starting place for my research on the internet to see just how Ja- pan’s economy was affected by them. I then divided them into different fac- tors by sources: culture, Japan’s governmental policies, world situations, and companies’ roles in changing procedures.
Internet Sources American Enterprise Institute for Public Policy Research, Economic Outlook - http://www.aei.org/eo Makin, John H. Economic Outlook, January 1998: “The Painful Death of the Japanese Model” Makin, John H. Economic Outlook, April 1999: “The End of the Golden Age”
Economic Education Web - http://ecedweb.unomaha.edu/K6goals.htm Reiser, Mary Lynn. Evidence of Student Learning: Social Studies Learning Goals in Economics
Educe Software - http://www.educesoft.com/quality/demming.htm Wilson, D. Demining’s 14 Point Plan for TQM, May, 1995.
Emporia State University - http://www.emporia.edu/mmfe/jour/jour24hrs/ salmon.htm Salmonson, Rob. Emporia State University: TQM, a Brief Overview.
Indiana University - http://www.indiana.edu/~japan/digest15.html Ellington, Lucien. Learning from the Japanese Economy, December 1999.
Japan Information Network: http://jin.jcic.or.jp/kidsweb/japan/k/q3.html Economy and Industry: Japan’s trade surplus is sometimes talked about internationally. http://jin.jcic.or.jp/today/econo/econo_1.html Postwar Development: http://jin.jcic.or.jp/today/econo/econo_2.html Current Economic Situation: http://jin.jcic.or.jp/today/econo/ econo_7.html Industry: http://jin.jcic.or.jp/stat/stats/08TRA3J.html
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